I have been asked to speak on some aspect of academic or
human freedom, an invitation that offers many choices. I will keep to some
simple ones.

Freedom without opportunity is a devil's gift, and the
refusal to provide such opportunities is criminal. The fate of the more
vulnerable offers a sharp measure of the distance from here to something
that might be called "civilization." While I am speaking, 1000 children will
die from easily preventable disease, and almost twice that many women will
die or suffer serious disability in pregnancy or childbirth for lack of
simple remedies and care. UNICEF estimates that to overcome such tragedies,
and to ensure universal access to basic social services, would require a
quarter of the annual military expenditures of the "developing countries,"
about 10% of U.S. military spending. It is against the background of such
realities as these that any serious discussion of human freedom should
proceed.

It is widely held that the cure for such profound social
maladies is within reach. The hopes have foundation. The past few years have
seen the fall of brutal tyrannies, the growth of scientific understanding
that offers great promise, and many other reasons to look forward to a
brighter future. The discourse of the privileged is marked by confidence and
triumphalism: the way forward is known, and there is no other. The basic
theme, articulated with force and clarity, is that "America's victory in the
Cold War was a victory for a set of political and economic principles:
democracy and the free market." These principles are "the wave of the future
-- a future for which America is both the gatekeeper and the model." I am
quoting the chief political commentator of the New York Times, but the
picture is conventional, widely repeated throughout much of the world, and
accepted as generally accurate even by critics. It was also enunciated as
the "Clinton Doctrine," which declared that our new mission is to
"consolidate the victory of democracy and open markets" that had just been
won. There remains a range of disagreement: at one extreme "Wilsonian
idealists" urge continued dedication to the traditional mission of
benevolence; at the other, "realists" counter that we may lack the means to
conduct these crusades of "global meliorism," and should not neglect our own
interests in the service of others. Within this range lies the path to a
better world.

Reality seems to me rather different. The current
spectrum of public policy debate has as little relevance to actual policy as
its numerous antecedents: neither the United States nor any other power has
been guided by "global meliorism." Democracy is under attack worldwide,
including the leading industrial countries; at least, democracy in a
meaningful sense of the term, involving opportunities for people to manage
their own collective and individual affairs. Something similar is true of
markets. The assaults on democracy and markets are furthermore related.
Their roots lie in the power of corporate entities that are totalitarian in
internal structure, increasingly interlinked and reliant on powerful states,
and largely unaccountable to the public. Their immense power is growing as a
result of social policy that is globalizing the structural model of the
third world, with sectors of enormous wealth and privilege alongside an
increase in "the proportion of those who will labor under all the hardships
of life, and secretly sigh for a more equal distribution of its blessings,"
as the leading framer of American democracy, James Madison, predicted 200
years ago. These policy choices are most evident in the Anglo-American
societies, but extend worldwide. They cannot be attributed to what "the free
market has decided, in its infinite but mysterious wisdom," "the implacable
sweep of `the market revolution'," "Reaganesque rugged individualism," or a
"new orthodoxy" that "gives the market full sway." The quotes are
liberal-to-left, in some cases quite critical. The analysis is similar
across the rest of the spectrum, but generally euphoric. The reality, on the
contrary, is that state intervention plays a decisive role, as in the past,
and the basic outlines of policy are hardly novel. Current versions reflect
"capital's clear subjugation of labor" for more than 15 years, in the words
of the business press, which often frankly articulates the perceptions of a
highly class-conscious business community, dedicated to class war.

If these perceptions are valid, then the path to a world
that is more just and more free lies well outside the range set forth by
privilege and power. I cannot hope to establish such conclusions here, but
only to suggest that they are credible enough to consider with care. And to
suggest further that prevailing doctrines could hardly survive were it not
for their contribution to "regimenting the public mind every bit as much as
an army regiments the bodies of its soldiers," to borrow the dictum of the
respected Roosevelt-Kennedy liberal Edward Bernays in his classic manual for
the Public Relations industry, of which he was one of the founders and
leading figures.

Bernays was drawing from his experience in Woodrow
Wilson's State propaganda agency, the Committee on Public Information. "It
was, of course, the astounding success of propaganda during the war that
opened the eyes of the intelligent few in all departments of life to the
possibilities of regimenting the public mind," he wrote. His goal was to
adapt these experiences to the needs of the "intelligent minorities,"
primarily business leaders, whose task is "The conscious and intelligent
manipulation of the organized habits and opinions of the masses." Such
"engineering of consent" is the very "essence of the democratic process,"
Bernays wrote shortly before he was honored for his contributions by the
American Psychological Association in 1949. The importance of "controlling
the public mind" has been recognized with increasing clarity as popular
struggles succeeded in extending the modalities of democracy, thus giving
rise to what liberal elites call "the crisis of democracy" as when normally
passive and apathetic populations become organized and seek to enter the
political arena to pursue their interests and demands, threatening stability
and order. As Bernays explained the problem, with "universal suffrage and
universal schooling,...at last even the bourgeoisie stood in fear of the
common people. For the masses promised to become king," a tendency
fortunately reversed -- so it has been hoped -- as new methods "to mold the
mind of the masses" were devised and implemented.

Quite strikingly, in both of the world's leading
democracies there was a growing awareness of the need to "apply the lessons"
of the highly successful propaganda systems of World War I "to the
organization of political warfare," as the chairman of the British
Conservative Party put the matter 70 years ago. Wilsonian liberals in the
U.S. drew the same conclusions in the same years, including public
intellectuals and prominent figures in the developing profession of
Political Science. In another corner of Western civilization, Adolf Hitler
vowed that next time Germany would not be defeated in the propaganda war,
and also devised his own ways to apply the lessons of Anglo-American
propaganda for political warfare at home.

Meanwhile the business world warned of "the hazard facing
industrialists" in "the newly realized political power of the masses," and
the need to wage and win "the everlasting battle for the minds of men" and
"indoctrinate citizens with the capitalist story" until "they are able to
play back the story with remarkable fidelity"; and so on, in an impressive
flow, accompanied by even more impressive efforts, and surely one of the
central themes of modern history.

To discover the true meaning of the "political and
economic principles" that are declared to be "the wave of the future," it is
of course necessary to go beyond rhetorical flourishes and public
pronouncements and to investigate actual practice and the internal
documentary record. Close examination of particular cases is the most
rewarding path, but these must be chosen carefully to give a fair picture.
There are some natural guidelines. One reasonable approach is to take the
examples chosen by the proponents of the doctrines themselves, as their
"strongest case." Another is to investigate the record where influence is
greatest and interference least, so that we see the operative principles in
their purest form. If we want to determine what the Kremlin meant by
"democracy" and "human rights," we will pay little heed to Pravda’s solemn
denunciations of racism in the United States or state terror in its client
regimes, even less to protestation of noble motives. Far more instructive is
the state of affairs in the "people's democracies" of Eastern Europe. The
point is elementary, and applies to the self-designated "gatekeeper and
model" as well. Latin America is the obvious testing ground, particularly
the Central America-Caribbean region. Here Washington has faced few external
challenges for almost a century, so the guiding principles of policy, and of
today's neoliberal "Washington consensus," are revealed most clearly when we
examine the state of the region, and how that came about.

It is of some interest that the exercise is rarely
undertaken, and if proposed, castigated as extremist or worse. I leave it as
an "exercise for the reader," merely noting that the record teaches useful
lessons about the political and economic principles that are to be "the wave
of the future."

Washington's "crusade for democracy," as it is called,
was waged with particular fervor during the Reagan years, with Latin America
the chosen terrain. The results are commonly offered as a prime illustration
of how the U.S. became "the inspiration for the triumph of democracy in our
time," to quote the editors of the leading intellectual journal of American
liberalism. The author, Sanford Lakoff, singles out the "historic North
American Free Trade Agreement (NAFTA)" as a potential instrument of
democratization. In the region of traditional U.S. influence, he writes, the
countries are moving towards democracy, having "survived military
intervention" and "vicious civil war."

Let us begin by looking more closely at these recent
cases, the natural ones given overwhelming U.S. influence, and the ones
regularly selected to illustrate the achievements and promise of "America's
mission."

The primary "barriers to implementation" of democracy,
Lakoff suggests, are the "vested interests" that seek to protect "domestic
markets" -- that is, to prevent foreign (mainly U.S.) corporations from
gaining even greater control over the society. We are to understand, then,
that democracy is enhanced as significant decision-making shifts even more
into the hands of unaccountable private tyrannies, mostly foreign-based.
Meanwhile the public arena is to shrink still further as the state is
"minimized" in accordance with the neoliberal "political and economic
principles" that have emerged triumphant. A study of the World Bank points
out that the new orthodoxy represents "a dramatic shift away from a
pluralist, participatory ideal of politics and towards an authoritarian and
technocratic ideal...," one that is very much in accord with leading
elements of twentieth century liberal and progressive thought, and in
another variant, the Leninist model; the two are more similar than often
recognized. Thinking through the tacit reasoning, we gain some useful
insight into the concepts of democracy and markets, in the operative sense.

Lakoff does not look into the "revival of democracy" in
Latin America, but he does cite a scholarly source that includes a
contribution on Washington's crusade in the 1980s. The author is Thomas
Carothers, who combines scholarship with an "insider's perspective," having
worked on "democracy enhancement" programs in Reagan's State Department.
Carothers regards Washington's "impulse to promote democracy" as "sincere,"
but largely a failure. Furthermore, the failure was systematic: where
Washington's influence was least, in South America, there was real progress
towards democracy, which the Reagan Administration generally opposed, later
taking credit for it when the process proved irresistible. Where
Washington's influence was greatest, progress was least, and where it
occurred, the U.S. role was marginal or negative. His general conclusion is
that the U.S. sought to maintain "the basic order of...quite undemocratic
societies" and to avoid "populist-based change," "inevitably [seeking] only
limited, top-down forms of democratic change that did not risk upsetting the
traditional structures of power with which the United States has long been
allied."

The last phrase requires a gloss. The term "United
States" is conventionally used to refer to structures of power within the
United States; the "national interest" is the interest of these groups,
which correlates only weakly with interests of the general population. So
the conclusion is that Washington sought top-down forms of democracy that
did not upset traditional structures of power with which the structures of
power in the United States have long been allied. Not a very surprising
fact, or much of a historical novelty.

To appreciate the significance of the fact, it is
necessary to examine more closely the nature of parliamentary democracies.
The United States is the most important case, not only because of its power,
but because of its stable and long-standing democratic institutions.
Furthermore, the United States was about as close to a model as one can
find. America can be "As happy as she pleases," Thomas Paine remarked in
1776: "she has a blank sheet to write upon. The indigenous societies were
largely eliminated. There is little residue of earlier European structures,
one reason for the relative weakness of the social contract and of support
systems, which often had their roots in pre-capitalist institutions. And to
an unusual extent, the socio-political order was consciously designed. In
studying history, one cannot construct experiments, but the U.S. is as close
to the "ideal case" of state capitalist democracy as can be found.

Furthermore, the leading Framer of the constitutional
system was an astute and lucid political thinker, James Madison, whose views
largely prevailed. In the debates on the Constitution, Madison pointed out
that in England, if elections "were open to all classes of people, the
property of landed proprietors would be insecure. An agrarian law would soon
take place," giving land to the landless. The system that he and his
associates were designing must prevent such injustice, he urged, and "secure
the permanent interests of the country," which are property rights. It is
the responsibility of government, Madison declared, "to protect the minority
of the opulent against the majority." To achieve this goal, political power
must rest in the hands of "the wealth of the nation," men who would
"sympathize sufficiently" with property rights and "be safe depositories of
power over them," while the rest are marginalized and fragmented, offered
only limited public participation in the political arena. Among Madisonian
scholars, there is a consensus that "The Constitution was intrinsically an
aristocratic document designed to check the democratic tendencies of the
period," delivering power to a "better sort" of people and excluding "those
who were not rich, well born, or prominent from exercising political power."
These conclusions are often qualified by the observation that Madison, and
the constitutional system generally, sought to balance the rights of persons
against the rights of property. But the formulation is misleading. Property
has no rights. In both principle and practice, the phrase "rights of
property" means the right to property, typically material property, a
personal right which must be privileged above all others, and is crucially
different from others in that one person's possession of such rights
deprives another of them. When the facts are stated clearly, we can
appreciate the force of the doctrine that "the people who own the country
ought to govern it," "one of [the] favorite maxims" of Madison's influential
colleague John Jay, his biographer observes.

One may argue, as some historians do, that these
principles lost their force as the national territory was conquered and
settled, the native population driven out or exterminated. Whatever one's
assessment of those years, by the late 19th century the founding doctrines
took on a new and much more oppressive form. When Madison spoke of "rights
of persons," he meant humans. But the growth of the industrial economy, and
the rise of corporate forms of economic enterprise, led to a completely new
meaning of the term. In a current official document, "`Person' is broadly
defined to include any individual, branch, partnership, associated group,
association, estate, trust, corporation or other organization (whether or
not organized under the laws of any State), or any government entity," a
concept that doubtless would have shocked Madison and others with
intellectual roots in the Enlightenment and classical liberalism --
pre-capitalist, and anti-capitalist in spirit.

These radical changes in the conception of human rights
and democracy were not introduced primarily by legislation, but by judicial
decisions and intellectual commentary. Corporations, which previously had
been considered artificial entities with no rights, were accorded all the
rights of persons, and far more, since they are "immortal persons," and
"persons" of extraordinary wealth and power. Furthermore, they were no
longer bound to the specific purposes designated by State charter, but could
act as they chose, with few constraints. The intellectual backgrounds for
granting such extraordinary rights to "collectivist legal entities" lie in
neo-Hegelian doctrines that also underlie Bolshevism and fascism: the idea
that organic entities have rights over and above those of persons.
Conservative legal scholars bitterly opposed these innovations, recognizing
that they undermine the traditional idea that rights inhere in individuals,
and undermine market principles as as well. But the new forms of
authoritarian rule were institutionalized, and along with them, the
legitimation of wage labor, which was considered hardly better than slavery
in mainstream American thought through much of the 19th century, not only by
the rising labor movement but also by such figures as Abraham Lincoln, the
Republican Party, and the establishment media.

These are topics with enormous implications for
understanding the nature of market democracy. Again, I can only mention them
here. The material and ideological outcome helps explain the understanding
that "democracy" abroad must reflect the model sought at home: "top-down"
forms of control, with the public kept to a "spectator" role, not
participating in the arena of decision-making, which must exclude these
"ignorant and meddlesome outsiders," according to the mainstream of modern
democratic theory. I happen to be quoting the essays on democracy by Walter
Lippmann, one of the most respected American public intellectuals and
journalists of the centruy. But the general ideas are standard and have
solid roots in the constitutional tradition, radically modified, however, in
the new era of collectivist legal entities.

Returning to the "victory of democracy" under U.S.
guidance, neither Lakoff nor Carothers asks how Washington maintained the
traditional power structure of highly undemocratic societies. Their topic is
not the terrorist wars that left tens of thousands of tortured and mutilated
corpses, millions of refugees, and devastation perhaps beyond recovery -- in
large measure wars against the Church, which became an enemy when it adopted
"the preferential option for the poor," trying to help suffering people to
attain some measure of justice and democratic rights. It is more than
symbolic that the terrible decade of the 1980s opened with the murder of an
Archbishop who had become "a voice for the voiceless," and closed with the
assassination of six leading Jesuit intellectuals who had chosen the same
path, in each case by terrorist forces armed and trained by the victors of
the "crusade for democracy." One should take careful note of the fact that
the leading Central American dissident intellectuals were doubly
assassinated: both murdered, and silenced. Their words, indeed their very
existence, are scarcely known in the United States, unlike dissidents in
enemy states, who are greatly honored and admired; another cultural
universal, I presume.

Such matters do not enter history as recounted by the
victors. In Lakoff's study, which is not untypical in this regard, what
survives are references to "military intervention" and "civil wars," with no
external factor identified. These matters will not so quickly be put aside,
however, by those who seek a better grasp of the principles that are to
shape the future, if the structures of power have their way.

Particularly revealing is Lakoff's description of
Nicaragua, again standard: "a civil war was ended following a democratic
election, and a difficult effort is underway to create a more prosperous and
self-governing society." In the real world, the superpower attacking
Nicaragua escalated its assault on the country's first democratic election:
the election of 1984, closely monitored and recognized as legitimate by the
professional association of Latin American scholars (LASA), Irish and
British Parliamentary delegations, and others, including a hostile Dutch
government delegation that was remarkably supportive of Reaganite
atrocities, as well as the leading figure of Central American democracy, Jos
Figueres of Costa Rica, also critical observer, though regarding the
elections as legitimate in this "invaded country," and calling on Washington
to allow the Sandinistas "to finish what they started in peace; they deserve
it." The U.S. strongly opposed the holding of the elections and sought to
undermine them, concerned that democratic elections might interfere with its
terrorist war. But that concern was put to rest by the good behavior of the
doctrinal system, which barred the reports with remarkable efficiency,
reflexively adopting the state propaganda line that the elections were
meaningless fraud.

Overlooked as well is the fact that as the next election
approached on schedule, Washington left no doubt that unless the results
came out the right way, Nicaraguans would continue to endure the illegal
economic warfare and "unlawful use of force" that the World Court had
condemned and ordered terminated, of course in vain. This time the outcome
was acceptable, and hailed in the U.S. with an outburst of exuberance that
is highly informative. At the outer limits of critical independence,
columnist Anthony Lewis of the New York Times was overcome with admiration
for Washington's "experiment in peace and democracy," which showed that "we
live in a romantic age." The experimental methods were no secret. Thus Time
magazine, joining in the celebration as "democracy burst forth" in
Nicaragua, outlined them frankly: to "wreck the economy and prosecute a long
and deadly proxy war until the exhausted natives overthrow the unwanted
government themselves," with a cost to us that is "minimal," leaving the
victim "with wrecked bridges, sabotaged power stations, and ruined farms,"
and providing Washington's candidate with "a winning issue," ending the
"impoverishment of the people of Nicaragua," not to speak of the continuing
terror, better left unmentiond. To be sure, the cost to them was hardly
"minimal": Carothers notes that the toll "in per capita terms was
significantly higher than the number of U.S. persons killed in the U.S.
Civil War and all the wars of the twentieth century combined." The outcome
was a "Victory for U.S. Fair Play," a headline in the Times exulted, leaving
Americans "United in Joy," in the style of Albania and North Korea.

The methods of this "romantic age," and the reaction to
them in enlightened circles, tell us more about the democratic principles
that have emerged victorious. They also shed some light on why it is such a
"difficult effort" to "create a more prosperous and self-governing society"
in Nicaragua. It is true that the effort is now underway, and is meeting
with some success for a privileged minority, while most of the population
faces social and economic disaster, all in the familiar pattern of Western
dependencies. Note that it is precisely this example that led the editors to
laud themselves as "the inspiration for the triumph of democracy in our
time," joining the enthusiastic chorus.

We learn more about the victorious principles by
recalling that these same representative figures of liberal intellectual
life had urged that Washington's wars must be waged mercilessly, with
military support for "Latin-style fascists,...regardless of how many are
murdered," because "there are higher American priorities than Salvadoran
human rights." Elaborating, editor Michael Kinsley, who represented "the
left" in mainstream commentary and television debate, cautioned against
unthinking criticism of Washington's official policy of attacking undefended
civilian targets. Such international terrorist operations cause "vast
civilian suffering," he acknowledged, but they may be "perfectly legitimate"
if "cost-benefit analysis" shows that "the amount of blood and misery that
will be poured in" yields "democracy," as the world rulers define it.
Enlightened opinion insists that terror is not a value in itself, but must
meet the pragmatic criterion. Kinsley later observed that the desired ends
had been achieved: "impoverishing the people of Nicaragua was precisely the
point of the contra war and the parallel policy of economic embargo and veto
of international development loans," which "wreck[ed] the economy" and
"creat[ed] the economic disaster [that] was probably the victorious
opposition's best election issue." He then joined in welcoming the "triumph
of democracy" in the "free election" of 1990.

Client states enjoy similar privileges. Thus, commenting
on yet another of Israel's attacks on Lebanon, foreign editor H.D.S.
Greenway of the Boston Globe, who had graphically reported the first major
invasion 15 years earlier, commented that "If shelling Lebanese villages,
even at the cost of lives, and driving civilian refugees north would secure
Israel's border, weaken Hezbollah, and promote peace, I would say go to it,
as would many Arabs and Israelis. But history has not been kind to Israeli
adventures in Lebanon. They have solved very little and have almost always
caused more problems." By the pragmatic criterion, then, the murder of many
civilians, expulsion of hundreds of thousand of refugees, and devastation of
southern Lebanon is a dubious proposition.

It would not be too hard, I presume, to find comparable
examples here in the recent past.

Bear in mind that I am keeping to the dissident sector of
tolerable opinion, what is called "the left," a fact that tells us more
about the victorious principles and the intellectual culture within which
they find their place.

Also revealing was the reaction to periodic Reagan
Administration allegations about Nicaraguan plans to obtain jet interceptors
from the Soviet Union (the U.S. having coerced its allies into refusing to
sell them). Hawks demanded that Nicaragua be bombed at once. Doves countered
that the charges must first be verified, but if they were, the U.S. would
have to bomb Nicaragua. Sane observers understood why Nicaragua might want
jet interceptors: to protect its territory from CIA overflights that were
supplying the U.S. proxy forces and providing them with up-to-the-minute
information so that they could follow the directive to attack undefended
"soft targets." The tacit assumption is that no country has a right to
defend civilians from U.S. attack. The doctrine, which reigned challenged,
is an interesting one. It might be illuminating to seek counterparts
elsewhere.

The pretext for Washington's terrorist wars was
self-defense, the standard official justification for just about any
monstrous act, even the Nazi Holocaust. Indeed Ronald Reagan, finding "that
the policies and actions of the Government of Nicaragua constitute an
unusual and extraordinary threat to the national security and foreign policy
of the United States," declared "a national emergency to deal with that
threat," arousing no ridicule, May 2, 1985.} Others react differently. In
response to John F. Kennedy's efforts to organize collective action against
Cuba in 1961, a Mexican diplomat explained that Mexico could not go along,
because "If we publicly declare that Cuba is a threat to our security, forty
million Mexicans will die laughing. Enlightened opinion in the West takes a
more sober view of the extraordinary threat to national security. By similar
logic, the USSR had every right to attack Denmark, a far greater threat to
its security, and surely Poland and Hungary when they took steps towards
independence. The fact that such pleas can regularly be put forth is again
an interesting comment on the intellectual culture of the victors, and
another indication of what lies ahead.

The substance of the Cold War pretexts is greatly
illuminated by the case of Cuba, as are the real operative principles. These
have emerged with much clarity once again in the past few weeks, with
Washington's refusal to accept World Trade Organization adjudication of a
European Union challenge to its embargo, which is unique in its severity,
and had already been condemned as a violation of international law by the
Organization of American States and repeatedly by the United Nations, with
near unanimity, more recently extended to severe penalties for third parties
that disobey Washington's edicts, yet another violation of international law
and trade agreements. The official response of the Clinton Administration,
as reported by the Newspaper of Record, is that "Europe is challenging
`three decades of American Cuba policy that goes back to the Kennedy
Administration,' and is aimed entirely at forcing a change of government in
Havana." The Administration also declared that the W.T.O. "has no competence
to proceed" on an issue of American national security, and cannot "force the
U.S. to change its laws."

At the very same moment, Washington and the media were
lauding the W.T.O. Telecommunications agreement as a "new tool of foreign
policy" that compels other countries to change their laws and practices in
accord with Washington's demands, incidentally handing over their
communications systems to mainly U.S. megacorporations in yet another
serious blow against democracy. But the W.T.O. has no authority to compel
the U.S. to change its laws, just as the World Court has no authority to
compel the U.S. to terminate its international terrorism and illegal
economic warfare. Free trade and international law are like democracy: fine
ideas, but to be judged by outcome, not process.

The reasoning with regard to the W.T.O. is reminiscent of
the official U.S. grounds for dismissing World Court adjudication of
Nicaragua's charges. In both cases, the U.S. rejected jurisdiction on the
plausible assumption that rulings would be against the U.S.; by simple
logic, then, neither is a proper forum. The State Department Legal Adviser
explained that when the U.S. accepted World Court jurisdiction in the 1940s,
most members of the U.N. "were aligned with the United States and shared its
views regarding world order." But now "A great many of these cannot be
counted on to share our view of the original constitutional conception of
the U.N. Charter," and "This same majority often opposes the United States
on important international questions." Lacking a guarantee that it will get
its way, the U.S. must now "reserve to ourselves the power to determine
whether the Court has jurisdiction over us in a particular case," on the
principle that "the United States does not accept compulsory jurisdiction
over any dispute involving matters essentially within the domestic
jurisdiction of the United States, as determined by the United States." The
"domestic matters" in question were the U.S. attack against Nicaragua.

The media, along with intellectual opinion generally,
agreed that the Court discredited itself by ruling against the United
States. The crucial parts of its decision were not reported, including its
determination that all U.S. aid to the contras is military and not
humanitarian; it remained "humanitarian aid" across the spectrum of
respectable opinion until Washington's terror, economic warfare, and
subversion of diplomacy brought about the "Victory for U.S. Fair Play."

Returning to the W.T.O. case, we need not tarry on the
allegation that the existence of the United States is at stake in the
strangulation of the Cuban economy. More interesting is the thesis that the
U.S. has every right to overthrow another government, in this case, by
aggression, large-scale terror over many years, and economic strangulation.
Accordingly, international law and trade agreements are irrelevant. The
fundamental principles of world order that have emerged victorious again
resound, loud and clear.

The Clinton Administration declarations passed without
challenge, though they were criticized on narrower grounds by historian
Arthur Schlesinger. Writing "as one involved in the Kennedy Administration's
Cuban policy," Schlesinger maintained that the Clinton Administration had
misunderstood Kennedy's policies. The concern had been Cuba's "troublemaking
in the hemisphere" and "the Soviet connection," Schlesinger explained. But
these are now behind us, so the Clinton policies are an anachronism, though
otherwise unobjectionable, so we are to conclude.

Schlesinger did not explain the meaning of the phrases
"troublemaking in the hemisphere" and "the Soviet connection," but he has
elsewhere, in secret. Reporting to incoming President Kennedy on the
conclusions of a Latin American Mission in early 1961, Schlesinger spelled
out the problem of Castro's "troublemaking" -- what the Clinton
Administration calls Cuba's effort "to destabilize large parts of Latin
America: it is "the spread of the Castro idea of taking matters into one's
own hands," a serious problem, Schlesinger added, when "The distribution of
land and other forms of national wealth greatly favors the propertied
classes...[and] The poor and underprivileged, stimulated by the example of
the Cuban revolution, are now demanding opportunities for a decent living."
Schlesinger also explained the threat of the "Soviet connection":
"Meanwhile, the Soviet Union hovers in the wings, flourishing large
development loans and presenting itself as the model for achieving
modernization in a single generation." The "Soviet connection" was perceived
in a similar light far more broadly in Washington and London, from the
origins of the Cold War 80 years ago.

With these (secret) explanations of Castro's
"destabilization" and "troublemaking in the hemisphere," and of the "Soviet
connection," we come closer to an understanding of the reality of the Cold
War, another important topic I will have to put aside. It should come as no
surprise that basic policies persist with the Cold War a fading memory, just
as they were carried out before the Bolshevik revolution: the brutal and
destructive invasion of Haiti and the Dominican Republic, to mention just
one illustration of "global meliorism" under the banner of "Wilsonian
idealism."

It should be added that the policy of overthrowing the
government of Cuba antedates the Kennedy Administration. Castro took power
in January 1959. By June, the Eisenhower Administration had determined that
his government must be overthrown. Terrorist attacks from U.S. bases began
shortly after. The formal decision to overthrow Castro in favor of a regime
"more devoted to the true interests of the Cuban people and more acceptable
to the U.S." was taken in secret in March 1960, with the addendum that the
operation must be carried out "in such a manner as to avoid any appearance
of U.S. intervention," because of the expected reaction in Latin America and
the need to ease the burden on doctrinal managers at home. At the time, the
"Soviet connection" and "troublemaking in the hemisphere" were nil, apart
from the Schlesingerian version. The CIA estimated that the Castro
government enjoyed popular support (the Clinton Administration has similar
evidence today). The Kennedy Administration also recognized that its efforts
violated international law and the Charters of the UN and OAS, but such
issues were dismissed without discussion, the declassified record reveals.

Let us move on to NAFTA, the "historic" agreement that
may help to advance U.S.-style democracy in Mexico, Lakoff suggests. A
closer look is again informative. The NAFTA agreement was rammed through
Congress over strenuous popular opposition but with overwhelming support
from the business world and the media, which were full of joyous promises of
benefits for all concerned, also confidently predicted by the U.S.
International Trade Commission and leading economists equipped with the most
up-to-date models (which had just failed miserably to predict the
deleterious consequences of the U.S.-Canada Free Trade Agreement, but were
somehow going to work in this case). Completely suppressed was the careful
analysis by the Office of Technology Assessment (the research bureau of
Congress), which concluded that the planned version of NAFTA would harm most
of the population of North America, proposing modifications that could
render the agreement beneficial beyond small circles of investment and
finance. Still more instructive was the suppression of the official position
of the U.S. labor movement, presented in a similar analysis. Meanwhile labor
was bitterly condemned for its "backward, unenlightened" perspective and
"crude threatening tactics," motivated by "fear of change and fear of
foreigners"; I am again sampling only from the far left of the spectrum, in
this case, Anthony Lewis. The charges were demonstrably false, but they were
the only word that reached the public in this inspiring exercise of
democracy. Further details are most illuminating, and reviewed in the
dissident literature at the time and since, but kept from the public eye,
and unlikely to enter approved history.

By now, the tales about the wonders of NAFTA have quietly
been been shelved, as the facts have been coming in. One hears no more about
the hundreds of thousands of new jobs and other great benefits in store for
the people of the three countries. These good tidings have been replaced by
the "distinctly benign economic viewpoint" -- the "experts' view" -- that
NAFTA had no significant effects. The Wall Street Journal reports that
"Administration officials feel frustrated by their inability to convince
voters that the threat doesn't hurt them" and that job loss is "much less
than predicted by Ross Perot," who was allowed into mainstream discussion
(unlike the OTA, the Labor movement, economists who didn't echo the Party
Line, and of course dissident analysts) because his claims were sometimes
extreme and easily ridiculed. "`It's hard to fight the critics' by telling
the truth -- that the trade pact `hasn't really done anything'," an
administration official observes sadly. Forgotten is what "the truth"
wasgoing to be when the impressive exercise in democracy was roaring full
steam ahead.

While the experts have downgraded NAFTA to "no
significant effects," dispatching the earlier "experts' view" to the memory
hole, a less than "distinctly benign economic viewpoint" comes into focus if
the "national interest" is widened in scope to include the general
population. Testifying before the Senate Banking Committee in February 1997,
Federal Reserve Board Chair Alan Greenspan was highly optimistic about
"sustainable economic expansion" thanks to "atypical restraint on
compensation increases [which] appears to be mainly the consequence of
greater worker insecurity" -- an obvious desideratum for a just society. The
February 1997 Economic Report of the President, taking pride in the
Administration's achievements, refers more obliquely to "changes in labor
market institutions and practices" as a factor in the "significant wage
restraint" that bolsters the health of the economy.

One reason for these benign changes is spelled out in a
study commissioned by the NAFTA Labor Secretariat "on the effects of the
sudden closing of the plant on the principle of freedom of association and
the right of workers to organize in the three countries." The study was
carried out under NAFTA rules in response to a complaint by
telecommunications workers on illegal labor practices by Sprint. The
complaint was upheld by the U.S. National Labor Relations Board, which
ordered trivial penalties after years of delay, the standard procedure. The
NAFTA study, by Cornell University Labor economist Kate Bronfenbrenner, has
been authorized for release by Canada and Mexico, but not by the Clinton
Administration. It reveals a significant impact of NAFTA on strike-breaking.
About half of union organizing efforts are disrupted by employer threats to
transfer production abroad; for example, by placing signs reading "Mexico
Transfer Job" in front of a plant where there is an organizing drive. The
threats are not idle: when such organizing drives nevertheless succeed,
employers close the plant in whole or in part at triple the pre-NAFTA rate
(about 15% of the time). Plant-closing threats are almost twice as high in
more mobile industries (e.g., manufacturing vs. construction).

These and other practices reported in the study are
illegal, but that is a technicality, on a par with violations of
international law and trade agreements when outcomes are unacceptable. The
Reagan Administration had made it clear to the business world that their
illegal anti-union activities would not be hampered by the criminal state,
and successors have kept to this stand. There has been a substantial effect
on destruction of unions -- or in more polite words, "changes in labor
market institutions and practices" that contribute to "significant wage
restraint" within an economic model offered with great pride to a backward
world that has not yet grasped the victorious principles that are to lead
the way to freedom and justice.

What was reported all along outside the mainstream about
the goals of NAFTA is also now quietly conceded: the real goal was to "lock
Mexico in" to the "reforms" that had made it an "economic miracle," in the
technical sense of this term: a "miracle" for U.S. investors and the Mexican
rich, while the population sank into misery. The Clinton Administration
"forgot that the underlying purpose of NAFTA was not to promote trade but to
cement Mexico's economic reforms," Newsweek correspondent Marc Levinson
loftily declares, failing only to add that the contrary was loudly
proclaimed to ensure the passage of NAFTA while critics who pointed out this
"underlying purpose" were efficiently excluded from the free market of ideas
by its owners. Perhaps some day the reasons will be conceded too. "Locking
Mexico in" to these reforms, it was hoped, would deflect the danger detected
by a Latin America Strategy Development Workshop in Washington in September
1990. It concluded that relations with the brutal Mexican dictatorship were
fine, though there was a potential problem: "a `democracy opening' in Mexico
could test the special relationship by bringing into office a government
more interested in challenging the US on economic and nationalist grounds"--
no longer a serious problem now that Mexico is "locked into the reforms" by
treaty. The U.S. has the power to disregard treaty obligations at will; not
Mexico.

In brief, the threat is democracy, at home and abroad, as
the chosen example again illustrates. Democracy is permissible, even
welcome, but again, as judged by outcome, not process. NAFTA was considered
to be an effective device to diminish the threat of democracy. It was
implemented at home by effective subversion of the democratic process, and
in Mexico by force, again over vain public protest. The results are now
presented as a hopeful instrument to bring American-style democracy to
benighted Mexicans. A cynical observer aware of the facts might agree.

Once again, the chosen illustrations of the triumph of
democracy are natural ones, and are interesting and revealing as well,
though not quite in the intended manner.

Markets are always a social construction, and in the
specific form being crafted by current social policy they should serve to
restrict functioning democracy, as in the case of NAFTA, the W.T.O.
agreements, and other instruments that may lie ahead. One case that merits
close attention is the Multilateral Agreement on Investment (MAI) that is
now being forged by the OECD, the rich men's club, and the W.T.O. (where it
is the MIA). The apparent hope is that the agreement will be adopted without
public awareness, as was the initial intention for NAFTA, not quite
achieved, though the "information system" managed to keep the basic story
under wraps. If the plans outlined in draft texts are implemented, the whole
world may be "locked into" treaty arrangements that provide Transnational
Corporations with still more powerful weapons to restrict the arena of
democratic politics, leaving policy largely in the hands of huge private
tyrannies that have ample means of market interference as well. The efforts
may be blocked at the W.T.O. because of the strong protests of the
"developing countries," notably India and Malaysia, which are not eager to
become wholly-owned subsidiaries of great foreign enterprises. But the OECD
version may fare better, to be presented to the rest of the world as a
fait accompli, with the obvious consequences. All of this proceeds in
impressive secrecy, so far.

The announcement of the Clinton Doctrine was accompanied
by a prize example to illustrate the victorious principles: What the
Administration had achieved in Haiti. Since this is again offered as the
strongest case, it would only be appropriate to look at it.

True, Haiti's elected President was allowed to return,
but only after the popular organizations had been subjected to three years
of terror by forces that retained close connections to Washington
throughout; the Clinton Administration still refuses to turn over to Haiti
160,000 pages of documents on state terror seized by U.S. military forces --
"to avoid embarrassing revelations" about U.S. government involvement with
the coup regime, according to Human Rights Watch. It was also necessary to
put President Aristide through "a crash course in democracy and capitalism,"
as his leading supporter in Washington described the process of civilizing
the troublesome priest.

The device is not unknown elsewhere, as an unwelcome
transition to formal democracy is contemplated.

As a condition on his return, Aristide was compelled to
accept an economic program that directs the policies of the Haitian
government to the needs of "Civil Society, especially the private sector,
both national and foreign": U.S. investors are designated to be the core of
Haitian Civil Society, along with wealthy Haitians who backed the military
coup, but not the Haitian peasants and slum-dwellers who organized a civil
society so lively and vibrant that they were even able to elect their own
president against overwhelming odds, eliciting instant U.S. hostility and
efforts to subvert Haiti's first democratic regime.

The unacceptable acts of the "ignorant and meddlesome
outsiders" in Haiti were reversed by violence, with direct U.S. complicity,
not only through contacts with the state terrorists in charge. The
Organization of American States declared an embargo. The Bush and Clinton
Administrations undermined it from the start by exempting U.S. firms, and
also by secretly authorizing the Texaco Oil Company to supply the coup
regime and its wealthy supporters in violation of the official sanctions, a
crucial fact that was prominently revealed the day before U.S. troops landed
to "restore democracy," but has yet to reach the public, and is an unlikely
candidate for the historical record.

Now democracy has been restored. The new government has
been forced to abandon the democratic and reformist programs that
scandalized Washington, and to follow the policies of Washington's candidate
in the 1990 election, in which he received 14% of the vote.

The prize example tells us more about the meaning and
implications of the victory for "democracy and open markets."

Haitians seem to understand the lessons, even if
doctrinal managers in the West prefer a different picture. Parliamentary
elections in April 1997 brought forth "a dismal 5 percent" of voters, the
press reported, thus raising the question "Did Haiti Fail US Hope?" We have
sacrificed so much to bring them democracy, but they are ungrateful and
unworthy. One can see why "realists" urge that we stay aloof from crusades
of "global meliorism."

Similar attitudes hold throughout the hemisphere. Polls
show that in Central America, politics elicits "boredom," "distrust" and
"indifference" in proportions far outdistancing "interest" or "enthusiasm"
among "an apathetic public...which feels itself a spectator in its
democratic system" and has "general pessimism about the future." The first
Latin America survey, sponsored by the EU, found much the same: "the
survey's most alarming message," the Brazilian coordinator commented, was
"the popular perception that only the elite had benefited from the
transition to democracy." Latin American scholars observe that the recent
wave of democratization coincided with neoliberal economic reforms, which
have been very harmful for most people, leading to a cynical appraisal of
formal democratic procedures. The introduction of similar programs in the
richest country in the world has had similar effects. By the early 1990s,
after 15 years of a domestic version of structural adjustment, over 80% of
the U.S. population had come to regard the democratic system as a sham, with
business far too powerful, and the economy as "inherently unfair." These are
natural consequences of the specific design of "market democracy" under
business rule.

Natural, and not unexpected. Neoliberalism is centuries
old, and its effects should not be unfamiliar. The well-known economic
historian Paul Bairoch points out that "there is no doubt that the Third
World's compulsory economic liberalism in the nineteenth century is a major
element in explaining the delay in its industrialization," or even
"deindustrialization," while Europe and the regions that managed to stay
free of its control developed by radical violation of these principles.
Referring to the more recent past, Arthur Schlesinger's secret report on
Kennedy's Latin American mission realistically criticized "the baleful
influence of the International Monetary Fund," then pursuing the 1950's
version of today's "Washington Consensus" ("structural adjustment,"
"neoliberalism"). Despite much confident rhetoric, not much is understood
about economic development. But some lessons of history seem reasonably
clear, and not hard to understand.

Let us return to the prevailing doctrine that "America's
victory in the Cold War" was a victory for democracy and the free market.
With regard to democracy, the doctrine is partially true, though we have to
understand what is meant by "democracy": top-down control "to protect the
minority of the opulent against the majority." What about the free market?
Here too, we find that doctrine is far removed from reality, as several
examples have already illustrated.

Consider again the case of NAFTA, an agreement intended
to lock Mexico into an an economic discipline that protects investors from
the danger of a "democracy opening." Its provisions tell us more about the
economic principles that have emerged victorious. It is not a "free trade
agreement." Rather, it is highly protectionist, designed to impede East
Asian and European competitors. Furthermore, it shares with the global
agreements such anti-market principles as "intellectual property rights"
restrictions of an extreme sort that rich societies never accepted during
their period of development, but that they now intend to use to protect
home-based corporations: to destroy the pharmaceutical industry in poorer
countries, for example -- and, incidentally, to block technological
innovations, such as improved production processes for patented products;
progress is no more a desideratum than markets, unless it yields benefits
for those who count.

There are also questions about the nature of "trade."
Over half of U.S. trade with Mexico is reported to consist of intrafirm
transactions, up about 15% since NAFTA. For example, already a decade ago,
mostly U.S.-owned plants in Northern Mexico employing few workers and with
virtually no linkages to the Mexican economy produced more than 1/3 of
engine blocks used in U.S. cars and 3/4 of other essential components. The
post-NAFTA collapse of the Mexican economy in 1994, exempting only the very
rich and U.S. investors (protected by U.S. government bailouts), led to an
increase of U.S.-Mexico trade as the new crisis, driving the population to
still deeper misery, "transformed Mexico into a cheap [i.e., even cheaper]
source of manufactured goods, with industrial wages one-tenth of those in
the US," the business press reports. Ten years ago According to some
specialists, half of U.S. trade worldwide consists of such centrally-managed
transactions and much the same is true of other industrial powers, though
one must treat with caution conclusions about institutions with limited
public accountability. Some economists have plausibly described the world
system as one of "corporate mercantilism," remote from the ideal of free
trade. The OECD concludes that "Oligopolistic competition and strategic
interaction among firms and governments rather than the invisible hand of
market forces condition today's competitive advantage and international
division of labor in high-technology industries," implicitly adopting a
similar view.

Even the basic structure of the domestic economy violates
the neoliberal principles that are hailed. The main theme of the standard
work on U.S. business history is that "modern business enterprise took the
place of market mechanisms in coordinating the activities of the economy and
allocating its resources," handling many transactions internally, another
large departure from market principles. There are many others. Consider, for
example, the fate of Adam Smith's principle that free movement of people is
an essential component of free trade -- across borders, for example. When we
move on to the world of Transnational Corporations, with strategic alliances
and critical support from powerful states, the gap between doctrine and
reality becomes substantial.

Free market theory comes in two varieties: the official
doctrine, and what we might call "really existing free market doctrine":
Market discipline is good for you, but I need the protection of the nanny
state. The official doctrine is imposed on the defenseless, but it is
"really existing doctrine" that has been adopted by the powerful since the
days when Britain emerged as Europe's most advanced fiscal-military and
developmental state, with sharp increases in taxation and efficient public
administration as the state became "the largest single actor in the economy"
and its global expansion, establishing a model that has been followed to the
present in the industrial world, surely by the United States, from its
origins.

Britain did finally turn to liberal internationalism --
in 1846, after 150 years of protectionism, violence, and state power had
placed it far ahead of any competitor. But the turn to the market had
significant reservations. 40% of British textiles continued to go to
colonized India, and much the same was true of British exports generally.
British steel was kept from U.S. markets by very high tariffs that enabled
the United States to develop its own steel industry. But India and other
colonies were still available, and remained so when British steel was priced
out of international markets. India is an instructive case; it produced as
much iron as all of Europe in the late 18th century, and British engineers
were studying more advanced Indian steel manufacturing techniques in 1820 to
try to close "the technological gap." Bombay was producing locomotives at
competitive levels when the railway boom began. But "really existing free
market doctrine" destroyed these sectors of Indian industry just as it had
destroyed textiles, ship-building, and other industries that were advanced
by the standards of the day. The U.S. and Japan, in contrast, had escaped
European control, and could adopt Britain's model of market interference.

When Japanese competition proved to be too much to
handle, England simply called off the game: the empire was effectively
closed to Japanese exports, part of the background of World War II. Indian
manufacturers asked for protection at the same time -- but against England,
not Japan. No such luck, under really existing free market doctrine.

With the abandonment of its restricted version of
laissez-faire in the 1930s, the British government turned to more direct
intervention into the domestic economy as well. Within a few years, machine
tool output increased five times, along with a boom in chemicals, steel,
aerospace, and a host of new industries, "an unsung new wave of industrial
revolution," Will Hutton writes. State-controlled industry enabled Britain
to outproduce Germany during the war, even to narrow the gap with the U.S.,
which was then undergoing its own dramatic economic expansion as corporate
managers took over the state-coordinated wartime economy.

A century after England turned to a form of liberal
internationalism, the U.S. followed the same course. After 150 years of
protectionism and violence, the U.S. had become by far the richest and most
powerful country in the world, and like England before it, came to perceive
the merits of a "level playing field" on which it could expect to crush any
competitor. But like England, with crucial reservations.

One was that Washington used its power to bar independent
development elsewhere, as England had done. In Latin America, Egypt, South
Asia, and elsewhere, development was to be "complementary," not
"competitive." There was also large-scale interference with trade. For
example, Marshall Plan aid was tied to purchase of U.S. agricultural
products, part of the reason why the U.S. share in world trade in grains
increased from less than 10% before the war to more than half by 1950, while
Argentine exports reduced by two-thirds. U.S. Food for Peace aid was also
used both to subsidize U.S. agribusiness and shipping and to undercut
foreign producers, among other measures to prevent independent development.
The virtual destruction of Colombia's wheat growing by such means is one of
the factors in the growth of the drug industry, which has been further
accelerated throughout the Andean region by the neoliberal policies of the
past few years. Kenya's textile industry collapsed in 1994 when the Clinton
Administration imposed a quota, barring the path to development that has
been followed by every industrial country, while "African reformers" are
warned that they "must make more progress" in improving the conditions for
business operations and "sealing in free-market reforms" with "trade and
investment policies" that meet the requirements of Western investors. In
December 1996 Washington barred exports of tomatoes from Mexico in violation
of NAFTA and W.T.O. rules (though not technically, because it was a sheer
power play and did not require an official tariff), at a cost to Mexican
producers of close to $1 billion annually. The official reason for this gift
to Florida growers is that prices were "artificially suppressed by Mexican
competition" and Mexican tomatoes were preferred by U.S. consumers. In other
words, free market principles were working, but with the wrong outcome.

These are only scattered illustrations.

One revealing is example is Haiti, along with Bengal the
world's richest colonial prize and the source of a good part of France's
wealth, largely under U.S. control since Wilson's Marines invaded 80 years
ago, and by now such a catastrophe that it may scarcely be habitable in the
not-too-distant future. In 1981, a USAID-World Bank development strategy was
initiated, based on assembly plants and agroexport, shifting land from food
for local consumption. USAID forecast "a historic change toward deeper
market interdependence with the United States" in what would become "the
Taiwan of the Caribbean." The World Bank concurred, offering the usual
prescriptions for "expansion of private enterprises" and minimization of
"social objectives," thus increasing inequality and poverty, and reducing
health and educational levels; it may be noted, for what it is worth, that
these standard prescriptions are offered side-by-side with sermons on the
need to reduce inequality and poverty and improve health and educational
levels, while World Bank technical studies recognize that relative equality
and high health and educational standards are crucial factors in economic
growth. In the Haitian case, the consequences were the usual ones: profits
for U.S. manufacturers and the Haitian superrich, and a decline of 56% in
Haitian wages through the 1980s -- in short, an "economic miracle." Haiti
remained Haiti, not Taiwan, which had followed a radically different course,
as advisers must surely know.

It was the effort of Haiti's first democratic government
to alleviate the growing disaster that called forth Washington's hostility
and the military coup and terror that followed. With "democracy restored,"
USAID is withholding aid to ensure that cement and flour mills are
privatized for the benefit of wealthy Haitians and foreign investors
(Haitian "Civil Society," according to the orders that accompanied the
restoration of democracy), while barring expenditures for health and
education. Agribusiness receives ample funding, but no resources are made
available for peasant agriculture and handicrafts, which provide the income
of the overwhelming majority of the population. Foreign-owned assembly
plants that employ workers (mostly women) at well below subsistence pay
under horrendous working conditions benefit from cheap electricity,
subsidized by the generous supervisor. But for the Haitian poor -- the
general population -- there can be no subsidies for electricity, fuel, water
or food; these are prohibited by IMF rules on the principled grounds that
they constitute "price control." Before the "reforms" were instituted, local
rice production supplied virtually all domestic needs, with important
linkages to the domestic economy. Thanks to one-sided "liberalization," it
now provides only 50%, with the predictable effects on the economy. The
liberalization is, crucially, one-sided. Haiti must "reform," eliminating
tariffs in accord with the stern principles of economic science -- which, by
some miracle of logic, exempt U.S. agribusiness; it continues to receive
huge public subsidies, increased by the Reagan Administration to the point
where they provided 40% of growers' gross incomes by 1987. The natural
consequences are understood, and intended: a 1995 USAID report observes that
the "export-driven trade and investment policy" that Washington mandates
will "relentlessly squeeze the domestic rice farmer," who will be forced to
turn to the more rational pursuit of agroexport for the benefit of U.S.
investors, in accord with the principles of rational expectations theory.

By such methods, the most impoverished country in the
hemisphere has been turned into a leading purchaser of U.S.-produced rice,
enriching publicly-subsidized U.S. enterprises. Those lucky enough to have
received a good Western education can doubtless explain that the benefits
will trickle down to Haitian peasants and slumdwellers -- ultimately.
Africans may choose to follow a similar path, as currently advised by the
leaders of "global meliorism" and local elites, and perhaps may see no
choice under existing circumstances -- a questionable judgment, I suspect.
But if they do, it should be with eyes open.

The last example illustrates the most important
departures from official free trade doctrine, more significant in the modern
era than protectionism, which was far from the most radical interference
with the doctrine in earlier periods either though it is the one usually
studied under the conventional breakdown of disciplines, which makes its own
useful contribution to disguising social and political realities. To mention
one obvious example, the industrial revolution depended on cheap cotton,
just as the "golden age" of contemporary capitalism has depended on cheap
energy, but the methods for keeping the crucial commodities cheap and
available, which hardly conform to market principles, do not fall within the
professional discipline of economics.

One fundamental component of free trade theory is that
public subsidies are not allowed. But after World War II, U.S. business
leaders expected that the economy would collapse without the massive state
intervention during the war that had finally overcome the great depression.
They also insisted that advanced industry "cannot satisfactorily exist in a
pure, competitive, unsubsidized, `free enterprise' economy" and that "the
government is their only possible savior" (Fortune, Business Week,
expressing a general consensus). They recognized that the Pentagon system
would be the best way to transfer costs to the public. Social spending could
play the same stimulative role, but it has defects: it is not a direct
subsidy to the corporate sector, it has democratizing effects, and it is
redistributive. Military spending has none of these unwelcome features. It
is also easy to sell, by deceit. President Truman's Air Force Secretary put
the matter simply: we should not use the word "subsidy," he said; the word
to use is "security." He made sure the military budget would "meet the
requirements of the aircraft industry," as he put it. One consequence is
that civilian aircraft is now the country's leading export, and the huge
travel and tourism industry, aircraft-based, is the source of major profits.

It was quite appropriate for Clinton to choose Boeing as
"a model for companies across America" as he preached his "new vision" of
the free market future, to much acclaim. A fine example of really existing
markets, civilian aircraft production is now mostly in the hands of two
firms, Boeing-McDonald and Airbus, each of which owes its existence and
success to large-scale public subsidy. The same pattern prevails in
computers and electronics generally, automation, biotechnology,
communications, in fact just about every dynamic sector of the economy.

There was no need to explain this central feature of
"really existing free market capitalism" to the Reagan Administration. They
were masters at the art, extolling the glories of the market to the poor at
home and the service areas abroad while boasting proudly to the business
world that Reagan had "granted more import relief to U.S. industry than any
of his predecessors in more than half a century" - in reality, more than all
predecessors combined, as they "presided over the greatest swing toward
protectionism since the 1930s," shifting the U.S. from "being the world's
champion of multilateral free trade to one of its leading challengers," the
journal of the Council on Foreign Relations commented in a review of the
decade. The Reaganites led "the sustained assault on [free trade] principle"
by the rich and powerful from the early 1970's that is deplored in a
scholarly review by GATT secretariat economist Patrick Low, who estimates
the restrictive effects of Reaganite measures at about three times those of
other leading industrial countries.

The great "swing toward protectionism" was only a part of
the "sustained assault" on free trade principles that was accelerated under
"Reaganite rugged individualism." Another chapter of the story includes the
huge transfer of public funds to private power, often under the traditional
guise of "security," a "defense buildup [that} actually pushed military R&D
spending (in constant dollars) past the record levels of the mid-1960s,"
Stuart Leslie notes. The public was terrified with foreign threats
(Russians, Libyans, etc.), but the Reaganite message to the business world
was again much more honest. Without such extreme measures of market
interference, it is doubtful that the U.S. automotive, steel, machine tool,
semiconductor industries, and others, would have survived Japanese
competition or been able to forge ahead in emerging technologies, with broad
effects through the economy.

There is also no need to explain the operative doctrines
to the leader of today's "conservative revolution," Newt Gingrich, who
sternly lectures 7-year old children on the evils of welfare dependency
while holding a national prize for directing public subsidies to his rich
constituents. Or to the Heritage Foundation, which crafts the budget
proposals for the congressional "conservatives," and therefore called for
(and obtained) an increase in Pentagon spending beyond Clinton's increase to
ensure that the "defense industrial base" remains solid, protected by state
power and offering dual-use technology to its beneficiaries to enable them
to dominate commercial markets and enrich themselves at public expense.

All understand very well that free enterprise means that
the public pays the costs and bears the risks if things go wrong; for
example bank and corporate bailouts that have cost the public hundreds of
billions of dollars in recent years. Profit is to be privatized, but cost
and risk socialized, in really existing market systems. The centuries-old
tale proceeds today without notable change, not only in the United States,
of course.

Public statements have to be interpreted in the light of
these realities, among them, Clinton's current call for trade-not-aid for
Africa, with a series of provisions that just happen to benefit U.S.
investors and uplifting rhetoric that manages to avoid such matters as the
long record of such approaches and the fact that the U.S. already had the
most miserly aid program of any developed country even before the grand
innovation. Or to take the obvious model, consider Chester Crocker's
explanation of Reagan Administration plans for Africa in 1981. "We support
open market opportunities, access to key resources, and expanding African
and American economies," he said, and want to bring African countries "into
the mainstream of the free market economy." The statement may seem to
surpass cynicism, coming from the leaders of the "sustained assault" against
"the free market economy." But Crocker's rendition is fair enough, when it
is passed through the prism of really existing market doctrine. The market
opportunities and access to resources are for foreign investors and their
local associates, and the economies are to expand in a specific way,
protecting "the minority of the opulent against the majority." The opulent,
meanwhile, merit state protection and public subsidy. How else can they
flourish, for the benefit of all?

To illustrate "really existing free market theory" with a
different measure, the most extensive study of TNCs found that "Virtually
all of the world's largest core firms have experienced a decisive influence
from government policies and/or trade barriers on their strategy and
competitive position" and "at least twenty companies in the 1993 Fortune 100
would not have survived at all as independent companies, if they had not
been saved by their respective governments," by socializing losses or simple
state takeover when they were in trouble. One is the leading employer in
Gingrich's deeply conservative district, Lockheed, saved from collapse by $2
billion government loan guarantees. The same study points out that
government intervention, which has "been the rule rather than the exception
over the past two centuries,...has played a key role in the development and
diffusion of many product and process innovations -- particularly in
aerospace, electronics, modern agriculture, materials technologies, energy
and transportation technology," as well as telecommunications and
information technologies generally (the Internet and World Wide Web are
striking recent examples), and in earlier days, textiles and steel, and of
course energy. Government policies "have been an overwhelming force in
shaping the strategies and competitiveness of the world's largest firms."
Other technical studies confirm these conclusions.

As these examples indicate, the United States is not
alone in its conceptions of "free trade," even if its ideologues often lead
the cynical chorus. The gap between rich and poor countries from 1960 is
substantially attributable to protectionist measures of the rich, the UN
Development Report concluded in 1992. The 1994 report concluded that "the
industrial countries, by violating the principles of free trade, are costing
the developing countries an estimated $50 billion a year -- nearly equal to
the total flow of foreign assistance" -- much of it publicly-subsidized
export promotion. The 1996 Global Report of the UN Industrial Development
Organization estimates that the disparity between the richest and poorest
20% of the world population increased by over 50% from 1960 to 1989, and
predicts "growing world inequality resulting from the globalization
process." That growing disparity holds within the rich societies as well,
the U.S. leading the way, Britain not far behind. The business press exults
in "spectacular" and "stunning" profit growth, applauding the extraordinary
concentration of wealth among the top few percent of the population while
for the majority, conditions continue to stagnate or decline. The corporate
media, the Clinton Administration, and the cheerleaders for the American Way
generally, proudly offer themselves as a model for the rest of the world;
buried in the chorus of self-acclaim are the results of deliberate social
policy during the happy period of "capital's clear subjugation of labor,"
for example, the "basic indicators" just published by UNICEF, revealing that
the U.S. has the worst record among the industrial countries, ranking
alongside of Cuba -- a poor Third World country under unremitting attack by
the hemispheric superpower for almost 40 years -- by such standards as
mortality for children under five, and also holding records for hunger,
child poverty, and other basic social indicators.

All of this takes place in the richest country in the
world, with unparalleled advantages and stable democratic institutions, but
also under business rule, to an unusual extent. These are further auguries
for the future, if the "dramatic shift away from a pluralist, participatory
ideal of politics and towards an authoritarian and technocratic ideal"
proceeds on course, worldwide.

It is worth noting that in secret, intentions are often
spelled out honestly, for example, in the early post-war II period, when
George Kennan, one of the most influential planners and considered a leading
humanist, assigned each sector of the world its "function": Africa's
function was to be "exploited" by Europe for its reconstruction, he
observed, the U.S. having little interest in it. A year earlier, a
high-level planning study had urged "that cooperative development of the
cheap foodstuffs and raw materials of northern Africa could help forge
European unity and create an economic base for continental recovery," an
interesting concept of "cooperation." There is no record of a suggestion
that Africa might "exploit" the West for its recovery from the "global
meliorism" of the past centuries.

If we take the trouble to distinguish doctrine from
reality, we find that the political and economic principles that have
prevailed are remote from those that are proclaimed. One may also be
skeptical about the prediction that they are "the wave of the future,"
bringing history to a happy end. The same "end of history" has confidently
been proclaimed many times in the past, always wrongly. And with all the
sordid continuities, an optimistic soul can discern slow progress,
realistically I think. In the advanced industrial countries, and often
elsewhere, popular struggles today can start from a higher plane and with
greater expectations than those of the past. And international solidarity
can take new and more constructive forms as the great majority of the people
of the world come to understand that their interests are pretty much the
same and can be advanced by working together. There is no more reason now
than there has ever been to believe that we are constrained by mysterious
and unknown social laws, not simply decisions made within institutions that
are subject to human will -- human institutions, which have to face the test
of legitimacy, and if they do not meet it, can be replaced by others that
are more free and more just, as often in the past.

Skeptics who dismiss such thoughts as utopian and naive
have only to cast their eyes on what has happened right here in the last few
years, an inspiring tribute to what the human spirit can achieve, and its
limitless prospects -- lessons that the world desperately needs to learn,
and that should guide the next steps in the continuing struggle for justice
and freedom here too, as the people of South Africa, fresh from one great
victory, turn to the still more difficult tasks that lie ahead.